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In Kuala Lumpur, Malaysia, the law pertaining to outsourcing is under regulations of broader Malaysian Employment Law and the Companies Act. Outsourcing refers to the practice of hiring third-party companies or individuals to perform tasks, services, or produce goods that were previously in-house within a company. These can include functions like customer service, manufacturing, or even IT. The law seeks to strike a balance between encouraging economic growth through outsourcing and ensuring fair employment practices and responsibility towards the welfare of outsourced employees.
Legal advice is often required when drafting, negotiating or reviewing outsourcing contracts to ensure legality and fairness. Businesses may also need assistance navigating through complex aspects of Malaysian law related to labor, immigration, data protection, intellectual property rights, and taxation as they pertain to outsourcing. Additionally, disputes arising from breaches of contract, employee rights, or terminations can necessitate legal help. A well-versed lawyer can provide guidance to help mitigate risks and handle any legal complications efficiently.
Some of the prominent local laws impacting outsourcing in Kuala Lumpur include the Employment Act 1955, the Personal Data Protection Act 2010, and parts of the Companies Act 2016. The Employment Act defines the rights and responsibilities of both employers and employees, and anyone involved in outsourcing needs to be aware of its provisions. The Personal Data Protection Act is pertinent when sensitive data is being handled by third-party providers. And parts of the Companies Act may come into play in an outsourcing scenario, with regards to corporate governance and responsibilities of a company.
Outsourced employees, similar to regular employees, are protected by the Malaysian Employment Act 1955. This assures them minimum wages, work hours, leaves, and more.
While there is no explicit legal restriction on what services can be outsourced, aspects like data security, intellectual property right protection, and nature of the business may impact such decisions. Certain business sectors like banking have specific guidelines on outsourcing.
The Personal Data Protection Act 2010 governs data protection in Malaysia, and concerns may be addressed to the Personal Data Protection Department under the Ministry of Communications and Multimedia Malaysia.
The company retains responsibilities towards an outsourced workforce as required by the Employment Act 1955 and Occupational Safety and Health Act 1994. The specific responsibilities can also be defined within the outsourcing contract.
Depending on the nature of the breach, different authorities may be involved. These can include the Malaysian Industrial Court, Civil courts, or different regulatory bodies for specific sectors.
Centre of Research on Employment and Work at Universiti Kebangsaan Malaysia is a notable academic institution in the field of labor studies. For additional resources, you may also refer to the Malaysian Investment Development Authority (MIDA), the Human Resources Ministry, and the Personal Data Protection Department.
If you need legal assistance pertaining to outsourcing, it is advisable to reach out to lawyers specializing in employment law or corporate law. Ensure to have a clear understanding of your requirements and any existing agreements before the consultation. It can also be beneficial to understand your obligations under local laws and ensure compliance to avoid any legal implications.
